Global alliance launches guidelines for fintech investors

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The Guidelines for Investing in Responsible Digital Financial Services have been launched by an international network of over 50 fintech investors and innovators, aiming to promote fintech funding by providing a framework for evaluating investment opportunities and risks.

The initiative is the work of an alliance of over 50 leading development banks, investment funds, family offices, private equity firms, debt fund managers, service providers and industry organizations focused on fintech and the financial sector; spanning Europe, the US, Africa, China and India.

Recognising the increase in investment opportunities and the correlated rise in risk faced by investors in the fintech and financial inclusion spaces, the Guidelines seek to provide a framework to support would-be investors in identifying where to best invest their time, energy, and money.

The Guidelines comprise 10 touchpoints that financial investors and their fintech investees can use to evaluate opportunities, mitigate risks and contribute to a more responsible and inclusive digital finance ecosystem.

These include promoting fair and transparent pricing and better disclosure of terms and conditions for customers, preventing people taking on more debt than they can comfortably manage, increasing their financial literacy, establishing customer identity, data privacy and security standards, fostering a proportionate legal and regulatory framework, and enabling the interoperability of digital financial services.  

Any investment organisation can subscribe to the Guidelines and join the community of investors. In return, they are asked to use them as the basis for due diligence and monitoring of their fintech investments, and to share new insights with their fellow investors as the fintech revolution spreads across the globe.

“By teaming up with other leading investors, we want to create a community of practice around responsible fintech that will give more low-income customers easier access to better and more affordable financial products,” says Wim van der Beek, managing partner of Goodwell Investments, a co-founder of the Guidelines.

“As an active investor in digital financial inclusion, we saw a growing need in the marketplace for a framework that could support investors and operators in building sustainable and trustworthy products and services. We’re proud that so many investors have joined us in our efforts to develop the guidelines that we are launching today.”

Other investors active in Africa to have signed the Guidelines include the International Finance Corporation (IFC), the Global Innovation Fund, Accion, Quona Capital; as well as innovators such as Nomanini, Paga, Musoni and Jumo.

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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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